Accelerating Clean Energy Future Timelines in Biden Era, Part 1
The past election was a close race between the president, Donald Trump, and his contender, Joe Biden. Red vs. Blue, Us vs. Them. But in the end, Biden won the election. With the change in president, there is a natural resistance to new thinking. However, that resistance shouldn’t carry over to advancing our clean energy goals at the federal level. Regardless of a political party, clean energy is our future. Because of its importance to the sustainability of our country, we will all be required to work together to do our part. And, as the largest producer of “unclean” energy, utilities should be leading the charge.
What is a Clean Energy Future?
A clean energy future in the U.S. means ending practices such as burning carbon–producing coal, oil, and natural gas, and relying on renewable energy instead. According to Ellabban, renewable energy is defined as energy that is collected from renewable resources, which are naturally replenished on a human timescale, including carbon–neutral sources like sunlight, wind, rain, tides, waves, and geothermal heat.
An important reason to support clean energy is that the combustion of non-renewable energy sources increases the amount of greenhouse gases released into Earth’s atmosphere. According to substantial research from academic and research institutions, greenhouse gases cause air pollution, animal extinction, and respiratory diseases. It has also been linked—with substantial debate—to global warming because it traps heat within the Earth’s atmosphere. Not only is it bad for the environment, people, and animals, nonrenewable energy sources aren’t sustainable—there isn’t enough to go around.
Current Policy on Clean Energy
While clean energy hasn’t been a federal priority over the last four years, there are still some important policies in place including:
- Greenhouse Gas Management. Mandates that agencies must track and report on energy management activities, performance improvements, cost reductions, greenhouse gas emissions, energy and water savings, and other appropriate performance measures;
- Renewable Energy Use Requirement. States that, of the total amount of electric energy the Federal government consumes during any fiscal year, the following amounts shall be renewable energy: not less than 7.5% in FY 2013 and each FY thereafter; and
- Renewable Energy and Electricity Policy. Demands that agencies meet statutory requirements relating to the consumption of renewable energy and electricity.
These three polices have been and will continue to be imperative in maintaining the use of renewable resources and reducing greenhouse gas emissions, but they aren’t enough. As a result, state and local governments stepped up during the Trump era. Three of the changes they enacted are:
- U.S. Climate Alliance. To combat the withdrawal from the Paris accord, 24 states and Puerto Rico have come together to implement policies that advance the goals of the Paris Agreement, track and report progress to the global community, and accelerate new and existing policies to reduce carbon pollution and promote clean energy deployment at the state and federal levels;
- Renewable Portfolio Standards (RPS). Mandates that a certain percentage of electricity generated by utility companies must come from a renewable source. According to the U.S. Energy Information Administration, starting in June 2019, 29 states and the District of Columbia had enforceable, renewable portfolio standards (RPS) or other mandated, renewable energy policies. Eight additional states had voluntary goals or objectives for renewable energy generation; and
- 100% Clean Future. According to Podesta, nine states, along with the District of Columbia and Puerto Rico, have enacted policies to move toward a 100 Percent Clean Future by 2050 or earlier.
Biden’s Build Back Better Plan
Once Biden takes office after the presidential inauguration on January 20, 2021, he plans to bolster efforts already underway through an investment of $2 trillion over the next four years.
While this is exciting news for our country, it is going to require a more aggressive commitment from utility companies. Pre-Biden, most of the largest utility companies had pledged to eliminate carbon from their operations by 2045 or 2050. Biden’s new plan is asking that utilities reach this goal by 2035.
Is it Doable?
“Is Biden’s plan doable?” is the question keeping utility leaders up at night.
First, it’s worth mentioning that not all clean energy needs to come from renewables specifically. Renewables, alone would limit the tools available to reach this goal. As a result, the plan allows for technology-neutral standards for clean energy and energy efficiency. It also means that carbon-free nuclear power —that delivers one-fifth of annual electricity production—is still okay.
The overall feasibility of this timeline was examined by the University of California, Berkeley, in a recent study. When researchers updated their models with the latest cost projections, they found the U.S. could achieve a reliable, 90 percent carbon-free grid by 2035, while simultaneously reducing wholesale prices by 13 percent.
“Reaching 90 percent clean requires doubling the highest historical, yearly, wind and solar deployment through the 2020s and tripling it in the 2030s,” said Sonia Aggarwal, VP at Energy Innovation, who researched the policies needed to achieve the scenarios in the Berkeley study.
“If we accelerate that deployment rate just a bit — say, triple the historical best deployment for solar and wind in the 2020s, make sure not to retire any existing nuclear as long as it stays safe, and pour some funding into [research and development] focused on the last 10 percent — it’s certainly feasible that we would have solutions for the last 10 percent within the next decade, putting us on track to achieve 100 percent by 2035,” she said.
The last 10% is a big question mark, Aggarwal noted. The grid needs to work 24/7, so a system of cheap wind and solar power needs complimentary resources to deliver power on demand.
What this Means for Utility Leaders
Biden’s environmental sustainability plan is also a business opportunity. There is a growing passion for the use of renewables by commercial and residential consumers. With the support and interest of both parties, utility leaders should be thinking about how to make renewable energy more easily accessible.
The Deloitte 2017 Energy Management study says, “There is high interest in installing solar panels among businesses and millennials. Businesses state their consumers demand a certain percent of energy must come from renewable resources, and consumers took major steps to reducing their electricity consumption in 2016.”
Consumers’ primary interest is saving money, with their second interest being environmental sustainability. What this means for utility leaders is that they can take advantage of the shift towards renewables and completely reinvent the way energy is sourced and delivered. Leaders can push for the customer–centric business model that utilizes the interests of consumers to provide a service that is unique to their needs.
Suggested next steps of the Deloitte 2017 Energy Management study include:
- Segmentation. Acknowledge and identify the differences in product, service, and communication preferences between residential and commercial customer segments, as well as differences within these segments.
- Partnerships. Partner within and outside power and utility industry to help meet evolving customer expectations, especially their desire for energy efficient products and services; and
- Smart Contact. Invest in integrating customer service and communication channels to strengthen provider–consumer relationships.
It is imperative that utility leaders take advantage of consumer interests now. Consumers are valuable stakeholders. Keep in mind, more needs being met by the provider will bring more customers. This is why customer–centricity is important. In order to create a product that is valued by the customers, utilities must understand customer needs and goals. Therefore, forming a new kind of relationship with clients—that includes implementing a continuous feedback loop—is imperative.
Sustainability, Our New Path Forward
As we’ve seen, utility businesses will be the catalyst to sparking a huge change in meeting Biden’s goals. It is the duty of utility leaders to reinvent their businesses to become more customer–centric to meet the needs of individuals. A 100% clean energy goal is a feasible plan if utility leaders use this opportunity to continue pushing renewable energy such as solar, wind and carbon–free nuclear power.
Today’s energy needs are constantly evolving. Understandably, it is hard to deal with change, but in order for a clean energy future to happen, utility models must adapt to meet customer expectations. Sustainability is not a fad. If they don’t take advantage of the growing, consumer interests in renewable energy, they will be left in the dust. Don’t let the dichotomy of red vs. blue take away from the importance of a green, sustainable, clean energy future. Utility leaders are needed more than ever and are the keystone to advancing America into the clean energy future.